New global trade links ‘threatened by London airport capacity’

Unless a speedy decision is made to build a new runway in SE England, Britain's attempts to foster trade links outside the European Union will be severely hampered, according to research conducted by KPMG.

David Sapsted

21 July 2016

The research, sponsored by the pressure group Let Britain Fly, said that despite London's reputation as an international hub, the capital was not directly connected to 128 cities around the world with populations of more than two million.And the report said that, by 2030, another 77 more cities of that size – 31 of them in either China or India – will exist and that the UK's ability to connect and trade with them will be limited unless airport expansion goes ahead.Despite a three-year inquiry by the government-appointed Airports Commission, which recommended in the summer of 2015 that a third runway should be built at Heathrow as soon as possible, the government has repeatedly delayed making a decision.It originally promised to decide on a new runway either at Heathrow or Gatwick by the end of last year, but then embarked on another environmental impact study amid growing opposition to Heathrow expansion among Conservative MPs. Now the decision promised this summer has been put back amid the political turmoil that has seen David Cameron resign as premier.Gavin Hayes, director of Let Britain Fly, said, "Brexit makes airport expansion more important than ever because we urgently need to unlock access to new markets. Yet this cannot happen at scale without a new runway."James Stamp, global head of aviation at KPMG, added, "Now, more than ever, UK plc needs to demonstrate both its ability and willingness to connect to trading partners and investors in the rest of the world. Making a positive commitment to vital UK aviation infrastructure will send a strong message that we are open for business, and would go a long way to alleviate the concern that we are missing those global connections that are so important for business, jobs, and growth."The report was published as budget airline Easyjet revealed its costs had increased by £40 million in the four weeks since the EU referendum, as a result of sterling's fall against the dollar and euro in the wake of Brexit decision.Carolyn McCall told the BBC that, although the airline's passenger numbers had been rising, the company had suffered because it paid for fuel in dollars and had considerable landing and other charges in euros. It is worth pointing out that although every airline is having a tough time, it is very good news for passengers," Ms McCall told the BBC Radio 4's Today programme. "It actually means it's cheaper to fly and ticket prices are low".She added that the post-referendum devaluation of sterling had not only increased Easyjet's costs but had also had an impact on consumers' confidence about booking holidays abroad, though she said she expected the situation to normalise over the coming months.

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